Pleasanton Weekly

Out-of-state retailers must start paying state sales taxes

Tax should show up on consumers' bills after Sept. 15

Out-of-state retailers will have to start paying the sales tax due to the California jurisdiction their goods are being sent to starting Sept. 15.

Although the sales tax has always been due on goods shipped here and for consumers who buy these goods, enforcement has been lax. Disputes in many states over how to collect sales taxes from out-of-state retailers have delayed states from implementing collection rules.

However, the state Board of Equalization is sending letters to 200 sellers not based in California to notify them of the policy change.

Steven E.F. Brown, writing in the San Francisco Business Times, said a law requiring out-of-state merchants to pay California sales taxes has been on the books since 1935, when the out-of-state boogeyman was the Sears mail-order catalog. More recently, it's been online giant Amazon.com Inc. that's been the Board of Equalization's focus.

A new California law, AB 155, now requires any retailer that sells more than $1 million in merchandise to California consumers and has had more than $10,000 in sales referred by an affiliate in the state must collect the use tax and pay it to the government.

California online shoppers will start seeing the tax on their bills Sept. 15, according to Brown.

"But the onus is still on consumers to pay the use tax if the retailer fails to charge them for it," Brown reported.